It's easy to understand why so many people want to believe that it's true -- especially in our industry and related ones, like retail POP displays, out-of-home advertising, and store fixtures & merchandising. With such a huge number of dollars at stake (75% of in-store retail purchases would have been about $975 billion in 2004 in the US alone, according to some very dirty extrapolation of these market statistics from Jupiter Media), anybody selling something to influence in-store buying decisions can make a strong argument about ROI. But I've seen the 75% number thrown around without any attribution far too many times to believe in it wholesale. That, and I have trouble believing that any arbitrary group of human beings can exhibit the same behavior 75% of the time.
So who is really the source of this stat? Several webpages, including this one from Q-Matic, suggest that it was first discovered in a European Consumer Buying Habit Study conducted by Point of Purchase Advertising International (POPAI). After poking around the POPAI archives, I haven't been able to find any studies by that name, nor have I found anything that makes a direct case for the 75% number. Oddly, though, I did find a few articles in their free research overview that are a bit more enlightening. The first is this overview of some of the group's more recent research efforts. Here are a few of the salient points:
by Prime Consulting Group, the study goes further in measuring reach
and frequency in the drug store environment. Findings show Retail
Marketing delivers 6.5% in incremental sales while reaching an average
5,850 people per week. Other findings:
- 3 to 4 times greater sales lift when advertising is part of the promotion program.
- 31% of the brands study experienced over 20% sales lift
- At-retail advertising drove additional sales 70% of the time
as the last three feet of the marketing plan, P-O-P advertising is the
only mass medium executed at the critical point where products,
consumers and the money to purchase the product all meet at the same
time. It is no coincidence that with 74 percent of all purchase decisions in mass merchandisers made in store, an increasing number of brand marketers and retailers invest in this medium (emphasis added).
One final source that I was trying to track down came from this article on Bell Canada's digital signage ambitions. In it, the author suggests that the J.C. Williams Group is responsible for the 75% number, quoting John Torella, a senior partner at the firm. I've sent a few emails to several contacts there who have not yet been able to confirm any sources of the information, but hopefully this will change soon :) I'll keep you posted on my findings, and certainly let us know if you come across any further sources of the industry's golden stat.
That's very true -- though I might be more inclined to call it the "IKEA effect" since their business model seems to be "get them to buy a flat-pack item, and then walk them past 10,000 accessories for it"